Financial News: New Bank Rescue Plan Unveiled
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It’s all about the economy and financial news today. And one of the big bits of news is that banks can count on a little more help from we the taxpayers. Earlier today, Timothy Geithner, the Treasury Secretary, unveiled his plan for bank rescue — or at least an outline of it. Some of the details need to be worked out. In any case, the idea is to take toxic assets off bank balance sheets and move them somewhere else. One of the main ways of doing this will be through investing, with both public and private money.
Geithner says that the cost will likely be somewhere between $1.5 trillion and $2 trillion. Of course, this is not money that will necessarily be approved through Congress. Indeed, this whole bank rescue plan underscores a rather disturbing fact of recent efforts at economic stimulus: Most of the money that has gone to stimulate the economy has not been in the form of large packages like the one approved by the Senate today. Instead, taxpayer obligations for economic stimulus (more than $7.2 trillion so far — without present efforts) have been coming in smaller increments of billions and millions, as emergency loans and small infusions.
While the American people focus on the current $800 billion economic stimulus bill, they are largely diverted from the fact that more than seven times that has already been spent on economic stimulus measures. It’s a very effective way to obscure the actual costs involved so far in attempts to stimulate the economy, most of which has gone to the banks. Perhaps this mess would be on its way to being resolved if all of that trillions had been given directly to the people, rather than being given to the bank in the hopes of a “trickle down” effect.
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February 10th, 2009 at 4:51 pm
[…] — from the bank rescue plan to the economic stimulus bill passed by the Senate today to the trillions already spend on banks and other companies — seems to be doing the […]